Compliance Certification in India

   by AEPC Dishain Business / Management    (submitted 2012-09-19)

With the increasing globalisation, a lot of importance is given to the internationally recognised compliance standards under which a product for export is manufactured. Increasingly, global brands and retailers are choosing to work with the factories that are certified in these standards.


There is a direct impact of social compliance on company's financial results, especially for organisations in consumer market where brand name and reputation are most critical assets. Companies adopt compliance code to protect their goodwill in the market.


The Indian garment industry needs to be tough on compliance rather than competing with other developing countries manufacturing inexpensive garments. The Apparel Export Promotion Council of India (AEPC), the apex industrial body that promotes apparel exports, aims at making India the global benchmark for social compliance in apparel manufacturing and export. With this objective, the Council has embarked on a project - Driving the Industry towards Sustainable Human Capital Advancement (Disha). The most important component of this project is the common compliance code.


The programme Disha also envisages international accreditation of this certification system for acceptance by the trading partners as an authentic and reliable certification system on compliance issues.


The major objective of the apparel certification program is to independently monitor and certify compliance with the various standards, ensuring that a given factory produces goods under lawful, humane and ethical conditions. Some of the principles are following:

Prohibition of child & forced labor: Manufacturers of Sewn Products should not use forced labor or any labour less than 14 years of age.
Minimum wages and benefits: Garment manufacturers should pay at least the minimum total compensation required by local law, including all mandated wages, allowances and benefits.
Prohibition of discrimination: Manufacturers of Sewn Products should employ, pay, promote, and terminate workers on the basis of their ability to do the job, rather than on the basis of personal characteristics or beliefs.
Working conditions: Organisations must provide employees with the adequate working conditions and comply with all applicable worker safety laws and regulations.

Certification Process


The compliance certification process includes the following steps:

Factory self-assessment: Each unit is required to fill an online self-assessment tool that will serve as the baseline for unit-level improvement tracking. It includes initial training and a root cause analysis to identify the cluster-level as well as unit-level gaps.
Improvement program: It includes the action plan (training programs) to improve processes and systems. These training programs address the key issues of Freedom of Association (FOA), child & forced labour, and wages & benefits.
Audit: After each unit has implemented their improvement plans over a period of 45-60 days, audit is done by the apparel export promotion council (AEPC) nominated auditors.
CAP & Remediation: It includes the corrective action plan (CAP) and various remediation steps.
Certification: After each unit has undergone gap analysis, training, process improvement, and final impact assessment, it will receive the compliance certification by AEPC-Disha. This certificate is valid for one year.

Certificate Classification


Following certificate classification codes are used to certify the level of compliance of the units:


Green Certificate: This is used to certify the units with mature compliance processes.


Yellow Certificate: This is used to certify the units with some compliance processes, but needs improvement.


Red Certificate: This is used to certify the units, which need establishment of compliance processes.